Almost all of the water of the planet occurs as saltwater in
the oceans. Of the 3 percent of the global resource that is freshwater,
two-thirds comes as snow and ice in polar and mountainous regions. Hence, liquid
freshwater constitutes about 1 percent of the global water resource. At any one
time, almost all of this occurs as groundwater, while less than 2 percent of it
is to be found in rivers and lakes. In the temperate, humid climates, about 40
percent of the precipitation ends up in the groundwater, and for
Mediterranean-type climates the figure is 10-20 percent. For the truly dry
climates, the value can be virtually zero (Bouwer, 2002). Not all the water in
rivers and lakes and in the groundwater is accessible for use because part of
the water flows in remote rivers and during seasonal floods that cannot be
captured before the water reaches the ocean. An estimated 9 000 - 14 000
km3 of water is economically available each year for human use. At
most, this represents 0.001 percent of the estimated global water. At present,
annual withdrawals of water for human use are about 3 600 km3. This
may give the impression that there is plenty of water available that could be
withdrawn for human use. However, part of the available surface water must
remain in the rivers and streams to ensure effluent dilution and safeguard the
integrity of the aquatic ecosystem. How large this part should be is little
understood. It varies with the time of year, and each river basin has its own
specific ecological limit below which the system can be expected to degrade. A
global estimate for this demand is 2 350 km3/year. Adding this to the
amount withdrawn each year for human use results in nearly 6 000 km3
of economically accessible water that is already committed (FAO, 2002b). This
indicates that globally the margin is fairly small. Because water and population
are distributed unevenly throughout the world, the water situation is already
critical in various countries and regions and likely to become so in several
more.

Agriculture is the principal user of all water resources taken
together, i.e. rainfall (so-called green water) and water in rivers, lakes and
aquifers (so-called blue water). It accounts for about 70 percent of all
withdrawals worldwide, with domestic use amounting to about 10 percent and
industry using some 21 percent (Figure 2).

Figure 2 Water withdrawals by
region and by sector

Source: Crops and drops. FAO, 2002

There is an important distinction between water withdrawn for
use and water actually consumed. In irrigated agriculture, about half of the
water withdrawn (with considerable variation in this figure) is consumed in
evaporation and transpiration from plants and moist soil surfaces. Some of the
plants that contribute to this evapotranspiration process are unproductive weeds
and plants on wasteland. Water that is abstracted but not consumed infiltrates
the soil and is stored as groundwater or flows back through drains into rivers.
This drainage water is generally of a lower quality than the water originally
withdrawn owing to contamination by agrochemicals and salts leached from the
soil profile. Compared with a return flow of 50 percent of the water withdrawn
for agriculture, 90 percent of the water for domestic use is returned to rivers
and aquifers as wastewater, while industry typically returns up to 95 percent.
Poor-quality return flows from urban and industrial areas are sometimes treated
before being returned to watercourses, but the non-point character of
agricultural pollution makes treatment difficult. In this sense, agricultural
water pollution may be better handled by controlling quantitative use and
outflow from agricultural land.

The significance of rainfed
production

Rain is the source of water for crop production in the more
humid regions of the world where some 60 percent of the worlds food crops
are grown. Rainfed agriculture takes place on some 80 percent of the arable land
and irrigated agriculture produces 40 percent of the worlds food crops on
the remaining 20 percent. In order to meet future food demands, it is expected
that relatively more crops will have to be grown on irrigated than on rainfed
land, such that about equal amounts will come from both types of areas. Given
the importance of rainfed cereal production, insufficient attention has been
paid to potential production growth in rainfed areas. Most attention usually
focuses on the possible expansion of irrigated areas. However, increasing cereal
yields in rainfed temperate countries, better plant protection and manure
techniques, and the use of supplemental irrigation in more arid countries
indicate the significant potential for improving rainfed agriculture.

In arid regions, water scarcity is the result of insufficient
rainfall. Semi-arid regions may receive enough annual rainfall to support crops
but the rainfall is distributed so unevenly in space and time that rainfed
agriculture is barely possible. Rainfall variability generally increases with a
decrease in annual amounts and it is particularly high in the Sahelian
countries. These regions are known for their periodic droughts that may last
several years. Rain in semi-arid regions also tends to fall in a few hard
showers. Such rainfall is difficult to capture for agricultural use. This leads
to large amounts of runoff going into drains and eventually seeping down to the
groundwater or to rivers. Where river discharge is large and difficult to
manage, one way to capture the flow is through spate irrigation in which part or
all of the river flow is diverted into fields surrounded by high bunds. In this
way, one irrigation of up to 50 cm can provide enough soil moisture for a wheat
crop even in the skeletal soils found in Yemen. Floodwater harvesting takes
place within a streambed and entails blocking the water flow. This causes water
to concentrate in the streambed. After the flood season is over, the streambed
area where the water collects is cultivated. A terraced wadi (ephemeral stream)
system is one type of floodwater harvesting. Here, a series of low check dams
are constructed across a wadi and the wadi area is cultivated. Too much flow
will breach the check dams or the diversion structures in spate irrigation. The
suitability of these methods also depends on the soil conditions and depth of
the wadi bed. Water harvesting, which is the collection and storage of surface
runoff, has also proved useful in semi-arid regions with infrequent rains
(Chapter 3).

Although there is a great variety of such rainwater
technologies, it is not clear whether their widespread use is always feasible,
especially for poor farmers. The costs involved in the construction and
maintenance of the water harvesting system play a major role in farmers
decisions on whether to adopt the technique or not. In the past, water
harvesting systems were often installed with financial support from outside
agencies, such as NGOs and international funding agencies. Many of those systems
failed because of lack of involvement of the beneficiaries and their inability
to organize and pay for maintenance. Rosegrant et al. (2001) report
construction costs for water harvesting systems in Turkana, Kenya, of US$625-1
015/ha. Labour and construction constitute the bulk of the water harvesting
costs as the opportunity cost for using the land is essentially zero. The
initial high labour costs of building the water harvesting system often provide
a disincentive for adoption of the technique. Moreover, many farmers in arid or
semi-arid areas do not have the human resources available to move the large
amounts of earth necessary in the larger systems. Therefore, small-scale water
and soil conservation techniques that are applicable at field level are often
adopted more easily. Investments on a larger scale require the existence or
creation of community organizations both to pay for the necessary investment and
maintenance, and to manage the benefits of the water harvesting infrastructure.
Maintenance of the system is sometimes required in the rainy season when labour
is relatively scarce and therefore expensive because of competition with
conventional agriculture (Tabor, 1995). Notwithstanding these reservations about
the widespread applicability of extensive water harvesting systems, model
studies indicate that there is significant scope for increasing rainfed
production provided that appropriate investments and policy changes are made
(Rosegrant et al., 2002). Crop breeding specifically for rainfed
environments is crucial to future cereal growth. Chapter 3 discusses integrating
crop and water resource management.

The growing role of
groundwater

Groundwater use for irrigation presents a paradox: regions
where the groundwater resource has been overdeveloped coexist with regions with
considerable potential for development of groundwater for use in irrigated
agriculture (Box 1). A corollary is the so-called fallacy of aggregation:
in aggregate terms, at the global or even national level, groundwater
availability appears far in excess of present use. The annual groundwater use
for the world as a whole has been placed at 750 - 800 km3 (Shah et
al., 2000). This figure may appear modest compared to the overall
groundwater reserves, but only a fraction of the worlds groundwater
reserves are economically available for agriculture. It is estimated that about
30 percent of the worlds irrigation supply is made up by groundwater but
this input accounts for some of the highest yields and highest value crops (FAO,
2003).

There remains confusion in the usage of the terms overabstraction
and groundwater mining. The latter refers solely to the depletion
of a stock of non-renewable groundwater, so leaving the aquifer dewatered
indefinitely. The planned mining of an aquifer is a strategic water resource
management option where the full physical, social and economic implications
are understood and accounted for over time. However, the replenishment
of aquifers by downward percolation of rainwater shows high interannual
variability and is a complex physical process that is difficult to evaluate.
A declining water table does not necessarily indicate overabstraction
of the groundwater resource. Overabstraction should not be defined in
terms of an annual balance of recharge and abstraction. Rather, it needs
to be evaluated over many years, as the limit between non-renewable stock
and the stock that is replenished by contemporary recharge from surface
percolation is usually unknown.

What is important to decision-makers and well users is the
overall reliability and productivity of a well (in terms of water levels,
volumes and water quality) during a given time period. Therefore, if a well taps
a particular aquifer, what is its sustainable rate of exploitation, given
variable periods of recharge and drought? The answer to this question is not
trivial, and requires a certain level of precision in understanding the system
dynamics. Where the system dynamics are understood, the maximum available
drawdown can be calculated from a nonlinear equation. This equation can be
resolved by an analytical approach or through the application of numerical
models. Where the aquifer system is sufficiently well known, the assigned value
of the maximum available drawdown may also include the exploitation of a portion
of the non-renewable groundwater resource. Such methods can provide a basis for
pre-empting aquifer degradation before physical and socio-economic damage is
done, by giving indications to users of sustainable abstraction rates.

The number of tubewells providing water to irrigated land in
India, China, Pakistan, Mexico and many other countries has grown rapidly in the
past 40 years. For example, some 60 percent of irrigated cereal production in
India depends on irrigation from groundwater wells. This has led to widespread
and uncontrolled overabstraction of the resource and the creation of a
bubble groundwater economy (Roy and Shah, 2002). In Yemen,
abstraction is estimated to exceed recharge by 400 percent (Box 2).
Groundwater abstraction and recharge have rarely been quantified accurately.
This should be a first step in assessing the potential for further development
of the resource and designing management approaches (Box 2). Where
irrigated agriculture depends in part on pumped groundwater, many of the command
areas present a mosaic of irrigation methods. These range from totally irrigated
by canal water to entirely fed by pumped groundwater, with most of the fields
having some combination of the two. Hence, irrigation is by definition
conjunctive, but there are few examples of conjunctive management.

Box 2 Participatory modernization of water management to reduce
overabstraction of groundwater in Yemen

Source: Dixon et al., 2001

The immediate consequence of the continuous decline in water resources
in Yemen has been household food insecurity, especially for poor families
in vulnerable rural areas. The only viable option is to improve the management
of the available resources through the introduction of appropriate technologies
and management tools.

In 1995, conscious of these issues, the Government of Yemen
launched a programme to improve the general efficiency of irrigation with
groundwater. It included the Land and Water Conservation Project (financed by
the World Bank). This project is based on cost sharing, farmer participation and
modern irrigation technologies.

Water savings achieved at the farm level have ranged from 10
to 50 percent. At the regional level, the savings in water use have averaged at
least 20 percent and have reached as high as 35 percent, particularly in
northwest Yemen where most of the farms are equipped with bubbler irrigation
systems. Considering the current operational costs that farmers pay for pumping
water (even with relatively low energy costs), the cost of investing in modern
equipment is recovered in 2-4 years through water savings alone. In addition,
the new technology offers benefits beyond water savings. These include
significant improvements in yield and product quality, resulting from changes in
cropping patterns and increases in the irrigated area.

In China, 52 percent of the irrigated lands are (at least in
part) served by tubewells. As a result of overabstraction of groundwater, water
tables have fallen by up to 50 m over the last 30 years. For example, in the
Fuyung Basin in north China, surface water has been curtailed drastically in
order to meet industrial demand, and farmers have responded by resorting to
groundwater irrigation. The root of the Asian groundwater crisis alluded to by
Shah et al. (2000) that threatens millions of poor rural communities lies
in the open access nature of the resource. Paradoxically, it is precisely this
feature of groundwater in shallow aquifers that has made it a powerful tool in
the fight against poverty (Moench, 2002), i.e. that everyone who can afford to
install a pump has free access to water. Irrigation with groundwater is
generally more productive than canal irrigation because groundwater is produced
close to where it is used with hardly any losses during transport. In addition,
farmers are in control of the timing and amount of the water extracted. Evidence
in India suggests that crop yield per cubic metre of water on
groundwater-irrigated farms tends to be 1.2 - 3 times higher than on farms
irrigated with surface water (Shah et al., 2000).

Throughout the world, most groundwater development has
proceeded primarily on the basis of individual initiatives. Unlike surface
irrigation or drinking-water supply projects where government agencies are
generally involved in many aspects of design, financing and implementation, most
groundwater development is driven by the decision of individual farmers to drill
wells and buy pumps. While governments often facilitate this process through
subsidies and rural electrification, large implementation departments are rare.
In consequence, there are very few government agencies that have frequent and
direct contact with groundwater users. Furthermore, surface water development
generally involves the diversion of flows or the construction of storage on a
clearly defined stream or water body. The impact of such actions on downstream
users is generally clear, at least in a conceptual sense. As a result, large
bodies of customary and formal law along with the resource monitoring and
enforcement systems required to implement them have developed over the long
history of surface water development. This is not generally the case with
large-scale groundwater development. It is a recent phenomenon and diversions
have a far less directly observable impact on other users. As a result,
groundwater extraction remains highly individualistic and tends to
occur outside the framework of established institutions for allocating,
monitoring or managing the resource base. In locations such as India, tens of
millions of individuals own and operate wells. Most of these wells are on
private lands. The location, use and even existence of such wells is often
unknown to any individual aside from the owners and their immediate community.
As a result, no established institutional basis for management exists.

The role of surface water
commands

Global indicators of water scarcity tend to ignore variations
in the importance of irrigated agriculture for food security among countries.
They also fail to account for seasonal differences in supply. For example, more
than 70 percent of the total supply in India occurs in the three monsoon months
of June, July and August, when most of it floods out to the sea. Moreover,
countrywide data ignore regional differences in water supply and withdrawal
within the country, an example of the aggregation fallacy. Regardless of these
caveats, most observers conclude that many countries do not have a surplus of
water available for irrigation. In fact, many countries do not have sufficient
annual water withdrawal to irrigate their potential gross irrigated area even at
high basin-irrigation efficiencies. Basin-irrigation efficiency includes all
reuse of drainage water and is considerably higher than system-irrigation
efficiency where drainage flow from one system is used for irrigation again
downstream in another system. Most analyses indicate that, whatever the water
scarcity indicator used, more than half of the worlds population lives in
countries with varying degrees of water scarcity. This scarcity can be physical
(there is no more water), economic (the country cannot afford to develop
additional water resources) or caused by a lack of social adaptive capacity.
Examples of adaptive capacity are the ability to produce more value per unit
water consumed, and imports virtual water, which is the water used
to produce the crops obtained on the world market (Allan, 1995) (Chapter 3, Box
5).

Plate 3 Farmlands under water
as a result of flash floods (Bangladesh)

FAO/9367/T. PAGE

There is concern that more people may be affected by food
insecurity as a result of water scarcity. Competition for the same resources
combined with the increasing trend of water pollution exacerbates this problem.
Moreover, the largely unknown impact of climate change may make water scarcity
in some countries more severe. Several studies suggest that rice yields are
likely to increase in the higher latitudes and decrease in the lower latitudes
under future climates. It is likely that the poorest countries (and the poorest
people within them) will suffer disproportionately as they are less able to
adapt to the changing conditions. Future projections by the IFPRI (based on
their model studies) indicate that water withdrawals will rise by some 22
percent between 1995 and 2025. Projected withdrawals in developing countries
will increase by 27 percent in the 30-year period, compared with 11 percent in
developed countries (Rosegrant et al., 2002). Only a very small increase
in irrigated area is expected, which will be more than offset by increases in
river basin efficiency.

However, FAO expects that the overall water withdrawal for
irrigation in all developing countries will increase from 2 128 km3
in the benchmark period of 1997/99 to 2 420 km3 in 2030, an increase
of nearly 14 percent. FAO further expects the irrigated area in developing
countries as a whole to increase from 202 million ha in 1997/99 to 242 million
ha by 2030, an increase of nearly 20 percent. The largest increase is expected
in sub-Saharan Africa with 44 percent, and the lowest in East Asia with 6
percent. The expected increase is 32 percent for Latin America, about 10 percent
for the Near East/North Africa and 14 percent for South Asia (FAO, 2002c;
Faurès et al., 2002). The effectively cultivated irrigated area is
expected to grow by 34 percent during the period under consideration, because of
higher cropping intensities. Much of the difference in the rates of increase of
water withdrawal and irrigated area relates to the higher water productivity in
irrigated agriculture that is expected to have occurred by 2030, with some
effect also from a change from water-intensive rice to wheat production,
especially in China.

For the 93 countries taken together, the irrigation water
withdrawals would increase from 8 percent in 1998 to 9 percent in 2030 if
expressed as a percentage of annually renewable water resources. This statistic
is of limited practical value where rainfall and river flows are highly
variable. It is also another example of the fallacy of aggregation. In the Near
East/North Africa region, irrigation withdrawal would increase from 40 to 53
percent of the renewable resource and in South Asia from 44 to 49 percent,
compared with an increase of 1-2 percent in Latin America. The regions with
withdrawals of more than 40 percent of their renewable water for irrigation
present the greatest challenge, especially as the differences are greater at the
country level. Of the 93 countries, 10 (including Egypt and Pakistan) now
withdraw more than 40 percent of their renewable water resources for irrigation,
while another 8 (including India and China) abstract more than 20 percent of the
renewable water for irrigation.

Plate 4 Section of the left
bank of the principle canal under construction at Bishenyi (Rwanda)

FAO/20232/FAO

Although the IFPRI and FAO predictions differ in the details,
they agree on the general direction of the expected changes. Closer agreement
cannot be expected as the model outcomes depend on the underlying assumptions. A
most important assumption is the extent to which water productivity in
agriculture can be increased between now and 2025 or 2030.

Investments in irrigation
infrastructure

An accurate global view of irrigation investment trends does
not exist, but certain proxies can be used to indicate such trends. For example,
there has been a sharp decline in World Bank lending for new irrigation schemes
(Jones, 1995). Funding for new irrigation construction has largely stopped and
the emphasis is on the sustainability and efficiency of existing systems.
According to Thompson (2001), irrigation and drainage is still one of the core
investment activities of the World Banks rural portfolio, but now mainly
in support of rehabilitation and the devolution of responsibilities to water
user associations (WUAs). However, the number of irrigation and drainage
projects is expected to decrease to well below what it was in the 1980s.
Investments in irrigation systems are perceived to have failed to address the
changing needs of irrigation services because rehabilitation of existing systems
was mostly carried out to restore original project objectives. This type of
rehabilitation is often inappropriate as it tends to ignore desirable changes in
cropping patterns and irrigation techniques and thus allows low
water-productivity practices to continue. Cost and time overruns in irrigation
projects as well as public opposition to large dam building projects have
further eroded the confidence of funding agents in irrigation investments.
Considering the negative aspects of irrigated agriculture (e.g. salinity,
waterlogging, health hazards, and groundwater exploitation), it can no longer be
taken for granted that irrigation is a protected, preferred practice and that
its negative externalities will be accepted unconditionally. Nevertheless,
irrigation development and dam building must continue, even if only to update
existing facilities and to replace dams and reservoirs that have lost most of
their storage capacity as a result of sedimentation. The loss of effective
capacity of Mediterranean dams is currently between 0.5 and 1 percent/year with
some as high as 3 percent (in Algeria). In Morocco, the reduction in regulating
capacity attributable to reservoir silt-up is equivalent to a loss of irrigation
potential of 6 000-8 000 ha/year (FAO, 2002d). Improved erosion control in
catchment areas may eventually prolong the life span of reservoirs and
dams.

A reduced level of investment in irrigation may not be all
bad. In the past, the construction of many irrigation systems was supply driven
as part of internationally funded development aid without significant input from
the future users of the scheme and sometimes against their expressed wishes.
Irrigation potential was and still is seen as an important indicator for
evaluating future irrigation development. This parameter expresses how much a
countrys irrigated area could be expanded according to land use and water
availability criteria. Hence, its value changes over time depending on the
countrys economy and competition for water. However, this notion of
irrigation potential has often been used as the sole criterion in setting a
countrys agricultural and water resource policies, without a parallel
analysis of economic, social, institutional and environmental constraints and
without a thorough market analysis. The failure of some irrigation schemes can
be attributed to a narrow focus on irrigation infrastructure and water
distribution combined with an insufficient focus on the productivity of the
agricultural systems and their responsiveness to agricultural markets (Burke,
2002).

The public policy of supply-driven irrigation development,
adhered to by many governments and donor agencies, may be justified because of
the observed importance of the role of irrigated agriculture in food security
(below). However, the role of the private sector in irrigation development is
often underestimated or ignored. The many investment decisions of smallholders
and commercial farmers could exceed public investment, e.g. in Zambia (FAO,
2002e) and India (Moench, 1994). In particular, where there is a comparative
advantage in irrigated production to service local and international markets,
which may be for vegetables and cut flowers rather than traditional food crops,
significant private irrigation investments appear to follow.

The role of irrigation in poverty
alleviation and rural development

Since 1960, growth in average cereal yields has largely kept
pace with the increase in world population. It is widely assumed that it will
continue to do so until the population begins to stabilize. Most of the increase
in grain production has been the result of yield increases rather than expansion
in cropped area. Projections by FAO, the IFPRI and the World Bank assume that
the further increases in cereal production will come from continuous increases
in yield. However, trends in yield data collected by FAO indicate that the
average world cereal yield would have to reach at least 4 tonnes/ha for a world
population of 8 000 million people from its present level of about 3 tonnes/ha
(Evans, 1998). At present, all the developed countries taken together have not
achieved an average cereal yield of 4 tonnes/ha. This is the extent of the
challenge.

The contribution from irrigated agriculture to achieving this
goal will be critical as irrigation provides a powerful management tool against
the vagaries of rainfall. Irrigation also makes it economically attractive to
grow high-yielding crops and to apply the adequate plant nutrition and pest
control required in order to obtain the full potential of these modern
varieties. According to the IFPRI, while food production will increase much
faster in developing countries than in developed countries, it will not keep
pace with demand, and food imports will need to increase. In 1999/2000,
developing countries produced 1 030 million tonnes of grain, i.e. 55 percent of
world production, and accounted for 61 percent of world grain consumption. To
bridge the gap between demand and production, developing countries imported 231
million tonnes of grain, equivalent to 72 percent of worldwide imports. These
statistics illustrate that developing countries play a major role in the
international agricultural trade and that they are highly susceptible to changes
in the world agricultural market in terms of food security. For the poorest
countries, an increase in domestic agricultural production is key to improving
food security. This explains why expectations about the food security role of
irrigated agriculture remain high (Box 3).

Box 3 Water for food security in China

Source: Heilig et al., 2000; Smil,
1996

The question whether China can produce food for its growing population
is controversial. Brown (1995) has suggested that the answer is no. One
of the counterarguments is that China has more farmland than the government
acknowledges officially. Another is that the official data underestimate
crop yields by up to 50 percent for crops in hilly interior regions. The
data are probably quite reliable for rice from the central and eastern
provinces.

Water shortage is probably the single most important problem
facing Chinas agriculture today. Water usage in China is predicted to rise
by 60 percent by 2050, as an increasing proportion of the people live in cities.
Water deficits may affect 36 percent of Chinas grain production, which is
produced in areas that either depend totally on irrigation or have significantly
higher production when irrigated. However, this also means that 64 percent of
crop production is not threatened systematically by water shortages, either
because it comes from fields in humid regions, or because precipitation is
sufficient for some rainfed production. However, because of drought conditions,
this production may not be attainable every year. Without irrigation and water
management, paddy fields in the humid south can probably not produce their
current two to three harvests but only one or two. However, in a large area in
Chinas south and southeast, there is no water scarcity problem but a water
scarcity challenge.

More efficient use of water and fertilizers combined with
lower post-harvest losses would constitute the most important improvements in
Chinas irrigated agriculture. The creation of WUAs has already contributed
to ensuring a more regular, guaranteed supply of water to farmers, who then
allocate water equitably through the associations. Other improvements could
include improved production of pork, reliance on broilers to supply most of the
additional demand for meat, expanded production of farmed fish, and increased
consumption of dairy products. This combination can contribute considerably to
meeting the countrys future nutrition needs without requiring enormous
imports of foreign grain.

Agricultural development based on water conservation and
irrigation is often considered a promising avenue for poverty alleviation in
rural areas. For example, the availability of water for a small domestic garden
plot, usually managed by women, can make a significant difference to household
nutrition and thus contribute to improved livelihoods. Water harvesting may make
this possible (FAO, 2002d). However, this effect is small scale and irrigated
agriculture with its higher crop yields is expected to have greater impact on
the incidence of poverty and malnutrition. This effect is expected regardless of
whether the irrigation project is small or large scale. However, recent studies
have shown that poverty alleviation as a result of irrigation development
requires that the project be geared towards the needs of the poor (van Koppen
et al., 2002). This includes access to training in the technical aspects
of irrigation but also in community organization and marketing. One of the
recurrent problems is the lack of access to credit, capital or land. Even
microcredits have no grace period; repayments typically have to start after a
few weeks. This makes them of little use for the purchase of cheap technology,
such as treadle pumps and microdrip systems. It has been argued that these
technologies are profitable within a short period and do not require a
subsidized price for poor people or specific poverty alleviation measures (FAO,
2002d). The problem of credit is not specific to irrigation development and
needs to be addressed in a more general sense for successful rural development
of poor regions.

Expanding irrigated areas, increasing the control of water and
applying high-yield technology in irrigated agriculture have given rise to large
increases in farm income, especially in Asia. However, this increase has been
disproportionately in the hands of the larger peasant farmers. They are not the
poorest of the poor, but their increased expenditure pattern has driven
increased employment of those who are the poorest of the poor. The latter have
little or no land and they benefit little even from agricultural production
programmes directed most closely to them. However, they benefit from lower food
prices, increased wages and growth in demand for rural non-farm goods and
services (FAO, 2002d; Mellor, 2001; Briscoe, 2001). By contrast, the capital-
and import-intensive consumption patterns of large-scale farmers, and especially
absentee farmers, contribute much less to poverty reduction. This is more
typical for some Latin American countries than for Asia and Africa.

Cost recovery from poor farmers for the operation and
maintenance (O&M) of irrigation systems is controversial. Subsidizing these
services and providing irrigation water far below cost is financially
unsustainable. Stepped tariffs in which the basic need is provided free to poor
people may work in the case of drinking-water but is difficult to implement for
irrigation water. Monitoring the efficiency of water use in agriculture for many
small farmers each using a small amount of water is expensive, but providing
irrigation water below cost contributes to wasting of water (FAO,
2002d).

In developing countries, agriculture generally produces many
non-tradable goods, such as food crops of lower quality and goods with unusually
high transaction costs. This aspect gives agriculture a prominent role in
poverty reduction. It also buffers the national economy from shocks to
international markets in agricultural commodities. For the rural poor in
low-income countries, increased employment opportunities allow them to escape
from poverty and hunger. Because they generally have few skills, the poor are
more likely to find employment in the production of goods and services that
cannot be marketed on the international market. Examples of this type of
employment include maintenance of irrigation and drainage structures, watershed
management, and afforestation, and where there is a sizeable storage reservoir,
employment could be found in fisheries, ecotourism and navigation. Thus,
increased employment and, hence, poverty reduction depend on increased domestic
demand for these non-tradable, non-farm goods and services. Agriculture is the
principle source of such demand and so it is only with rising farm incomes that
poverty can be reduced and food security increased (FAO, 2001c).

Plate 6 Women watering
cabbages in a vegetable garden with water drawn from a deep well
(Mali)

FAO/13710/J. ISAAC

Hence, investments in irrigation development may achieve
additional goals such as enhancing economic growth and poverty alleviation in
rural areas. Nonetheless, the question may be asked whether investments in other
parts of the infrastructure are not more likely to achieve these goals. For
example, the steady decline in poverty in India from the mid-1960s to the early
1980s was strongly associated with agricultural growth, particularly the green
revolution, which coincided with massive investments in agriculture and rural
infrastructure (Fan et al., 1999). According to IFPRI studies in India,
the impact of additional irrigation investments on poverty reduction ranked
third after rural roads, and agricultural research and extension. Additional
government spending on irrigation had a significant impact on productivity
growth, but no discernible impact on poverty reduction. While spending on
irrigation and power has been essential in the past for sustaining agricultural
growth, the levels of irrigation may now be such that it may be more important
to maintain rather than increase the systems. The IFPRI studies have also
indicated that the marginal returns to several infrastructural investments in
India are now higher in many rainfed areas. They also have a potentially greater
impact on reducing rural poverty (Bhalla et al., 1999).

A global analysis of the link between farming systems and
poverty indicates that the prospects for reducing agricultural poverty in the
Near East and North Africa are good (Dixon et al., 2001). However, for
the region as a whole, exit from agriculture is the best household strategy for
poverty reduction, followed by increased off-farm income. The study indicates
that the priority roles of the State are to support the development of vital
infrastructure, such as roads, water supplies, services and power supply, and to
regulate resource use and pricing for water and power. By comparison, in South
Asia, measures that support households in small-farm diversification and also
for growth in employment opportunities in the off-farm economy were found to be
the most likely to contribute to poverty reduction.

When weighing the pros and cons of new irrigation investments
against the benefits of other investments, all additional potential benefits of
irrigation, such as health benefits resulting from better nutrition (i.e. more
calories and a more balanced diet) and greater rural employment, should be taken
into account. Many of the irrigation benefits are site-specific and
generalizations cannot be made. Moreover, without proper techniques for
monitoring the physical performance of irrigation systems, it is impossible to
assess the potential benefits that may accrue from further investments to
improve them. Notwithstanding these caveats, the fundamental question concerning
the economic utility of further investments in irrigation development as a means
towards rural development and poverty alleviation is an important one. At least
two conclusions can be drawn from the discussion of the role of water in
sustainable food production, poverty alleviation and rural development. The
first is that donor agencies and governments have a difficult choice to make
when investing for poverty reduction and rural development. The choice is not
automatically for agriculture or water. The second conclusion is that the right
set of government policies can make a large difference in food production,
poverty reduction and rural development.